Lear to buy European auto seating company

Lear, a Southfield-based automotive seating and electrical distribution system supplier, said in a statement that the transaction is valued at €286 million ($307 million) on a cash and debt-free basis. It expects to close on the acquisition in the first half of the year, subject to the usual regulatory approvals in Europe.

The deal adds strength for Lear among European automakers. The acquired unit's $322 million in annual sales are concentrated in five European countries.

The seating business has consolidated heavily over the past five years, with the largest players — Novi-based Magna International Inc., Plymouth-based Adient Inc. and Lear — vying for market share. Seating is seen as an area ripe for growth, with the expected rise of autonomous vehicles potentially redefining automotive interiors.

The strong dollar and weak euro also likely made the acquisition appealing for Lear.

Grupo Antolin's seating business specializes in seat assembly, structures and mechanisms, and trim. It employs 2,273 in six countries. In 2015, its seating unit had sales of 215 million euros, an increase of 4.7 percent on the previous year. The seating unit represented 6.1 percent of Grupo Antolin’s overall sales in 2015.

In a statement, Grupo Antolin said it would continue to focus on growing its interiors business.

"The company intends to accelerate investments already planned to improve its production capabilities, open new factories, and increase R&D capabilities to deliver the best interior solutions to its customers," the statement said.

Lear's sales rose 2 percent in 2016 to $18.56 billion.

"The acquisition ... is another important step in strengthening our core seating business by further diversifying our global seating sales, expanding our seat component capabilities and accelerating profitable sales growth," Lear CEO Matt Simoncini said in the statement.

Analyst Brian Johnson of Barclays, in a report issued after the deal was announced, said the deal could help build Lear's profit margins in its seating business.

"As we understand, Antolin’s Seating margins are higher than LEA’s current margins," the report said. "And given Antolin has noted in the past that it is limited in its ability to compete in seating with the likes of LEA, ADNT, and others, this deal is likely an example of an asset that is better held by a more natural owner. Accordingly, LEA may be able to drive some scale efficiencies in the assets, which Antolin wasn’t able to do given its smaller share."